Shares of the Seattle-based tech giant have notched six straight days of gains amid a push higher in tech stocks and the broader stock market. Microsoft’s stock started Tuesday’s session higher, but has since given back most of its gains. According to Yahoo Finance data, Microsoft’s stock has out-performed the Nasdaq Composite by about two times month-to-date.
The Dow Jones Industrial Average (in which Microsoft is a key component) so far in March has dropped by 1.1% as investors fret over the outcome of U.S. trade tensions with China. That makes the move in Microsoft even more noteworthy.
Fun fact to keep in mind: Microsoft’s stock has risen by 27% during the past year. That is better than the performance of all FAANG components (Facebook, Amazon, Apple, Netflix and Alphabet). The average gain for this often-hyped group of next-generation tech players this past year: a gain of 8.3% (held back by a 6% drop in the negative headline ridden Facebook.
But to Microsoft’s recent gains, they come in part due to a rotation back into software stocks. And the Federal Reserve’s easy monetary policy, which usually has the effect of boosting riskier areas of the market such as high-growth tech. Further boosting sentiment for stocks like Microsoft are the recent strong fourth quarter results from cloud names Salesforce and Adobe.
Couple that improved sentiment with Microsoft’s strong fundamental story, and you have one of the hotter trades in the market right now. “We think the underlying business fundamentals remain strong driven by Azure, Office 365 commercial, LinkedIn and Dynamics,” said BMO Capital Markets tech analyst Keith Bachman.
Bachman’s price target on Microsoft is $125. Microsoft was last trading at around $117.
Brian Sozzi is an editor-at-large at Yahoo Finance. Follow him on Twitter @BrianSozzi